RBS looks to offload stake in Ulster Bank to private equity players in a bid to lift shares ahead of Government sale

Royal Bank of Scotland is considering selling a slice of troubled offshoot Ulster Bank to private equity players.

The complex plan, one of a number of options being considered, could help lift shares in RBS prior to a sale of the Government’s stake in the bank.

Ulster Bank has been a drag on RBS as chief executive Ross McEwan attempts to turn around the fortunes of the state-backed lender.

Sale: Ulster Bank has been a drag on RBS as chief executive Ross McEwan attempts to turn around the fortunes of the state-backed lender

Ulster has accumulated £2.5billion of losses over the past couple of years, but if RBS managed to reduced its stake to below 50 per cent the losses would not have to feature in the accounts.

McEwan said in February that RBS would be staying in the Republic of Ireland and Northern Ireland while considering the options for Ulster Bank.

In terms of the Republic he said: ‘We want to make sure that, A, we stay there, but two, just try to create some far better economy of scale and we were happy to work with other parties on that.’ McEwan has promised to have hatched a solution by August.

One of the options being considered is to sell a stake to a private equity firm, which would then merge Ulster with another Irish bank to gain scale and cost savings.

Some of the private equity firms understood to be considering a deal are Warburg Pincus, CVC, KKR and Permira. RBS would retain a reduced stake so the company could benefit from any upside.

An RBS spokesman declined to comment.

RBS is also on course to part company with long-standing auditor Deloitte – the alma mater of discredited former boss Fred Goodwin.

Deloitte, where Goodwin worked as an accountant, has audited RBS since March 2000 and is still in situ despite failing to issue any warnings ahead of the near-collapse of the bank in 2008.

RBS intends to put the audit contract for 2016 and future periods up for tender later this year.

The move follows an investigation by the competition regulators that recommended companies should put the audit out to tender at least once a decade.

RBS is following other lenders including the Co-op Bank, which recently announced was parting ways with KPMG after 40 years.

The firm’s audit of the Co-op Bank’s accounts for 2012 is being probed by accountancy regulators.

KPMG is also under the spotlight for a role as auditor of HBOS, which was rescued by Lloyds at the height of the financial crisis.

Barclays is to tender for a new auditor to check accounts from 2017 or 2018.

PricewaterhouseCoopers, which has audited the bank since 1896, will not be invited to pitch.Lloyds Banking Group, which has also been audited by PwC for more than a century, has asked firms to pitch for the audit contract from 2016.